Malaysia’s Petronas Will Prioritize Capital Buffers In The Face Of Energy Difficulties

Malaysia’s state oil company Petroliam Nasional Berhad said on Wednesday that it is looking into focusing on bolstering its capital position to approach the rising energy market volatility and “restrictive” access to finance.

Petronas, as the business is known, reported a 29% reduction in second-quarter earnings, in a row with other oil giants such as Chevron, Exxon Mobil, and Shell, as energy costs plummeted from a year and a half ago highs achieved during Russia’s invasion of Ukraine.

Tengku Muhammad Taufik Tengku Aziz, CEO of Petronas, predicted that oil and gas prices will remain unpredictable in the face of an “uncompromisingly uncertain” macroenvironment. He anticipates Brent crude to trade between $70 to $80 per barrel for the rest of the year, down from roughly $86 on Wednesday.

According to the CEO, access to external finance is becoming increasingly challenging as financial institutions prioritize sustainable projects, prompting Petronas to reassess its capital strategy and develop cash reserves for expansion.

Petronas, the world’s fourth-largest LNG exporter, would raise investments in its core business, he pointed out, even as it strives to lower emissions and invest in cleaner energy.

Petronas stated it will give a 40 billion ringgit dividend to the Malaysian government, its sole shareholder, this year, down from 50 billion ringgit last year.